Williams-Sonoma, Inc. stock research
FY2023 Q3
Williams-Sonoma (WSM) Gross Margin — Quarter Ended Oct 29, 2023
Revenue and cost of revenue both decreased, but gross profit as a share of revenue improved relative to both the prior quarter and the same quarter last year. The gross margin rose, meaning cost of revenue fell faster or revenue held steadier relative to the prior comparison periods.
Gross margin takeaway
Quarter ended Oct 29, 2023 · FY2023 Q3
Revenue and cost of revenue both decreased, but gross profit as a share of revenue improved relative to both the prior quarter and the same quarter last year. The gross margin rose, meaning cost of revenue fell faster or revenue held steadier relative to the prior comparison periods.
- The most observable driver of gross margin improvement is the larger decline in cost of revenue relative to revenue, as seen in both the sequential and year-ago comparisons.
- Compared to the immediately preceding quarter, revenue was essentially stable while cost of revenue was lower and gross profit was higher, resulting in an improved gross margin. Compared to the same quarter one year earlier, revenue was lower but cost of revenue fell by a greater proportion, leading to a higher gross margin despite lower gross profit.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
44.4%
Gross profit
$822.4M
Revenue
$1.9B
Cost of revenue
$1.0B
Quarter-over-quarter change
+3.7 pts
Year-over-year change
+2.8 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Jan 29, 2023 | $2.5B | $1.0B | $1.4B | 41.2% |
| Apr 30, 2023 | $1.8B | $675.1M | $1.1B | 38.5% |
| Jul 30, 2023 | $1.9B | $757.6M | $1.1B | 40.7% |
| Oct 29, 2023 | $1.9B | $822.4M | $1.0B | 44.4% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jul 30, 2023
+3.7 pts
Year-over-year change
Oct 30, 2022
+2.8 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The most observable driver of gross margin improvement is the larger decline in cost of revenue relative to revenue, as seen in both the sequential and year-ago comparisons.
Compared to the immediately preceding quarter, revenue was essentially stable while cost of revenue was lower and gross profit was higher, resulting in an improved gross margin. Compared to the same quarter one year earlier, revenue was lower but cost of revenue fell by a greater proportion, leading to a higher gross margin despite lower gross profit.
Monitor whether the trend of cost of revenue declining faster than revenue can persist in subsequent quarters.